Earn a projected 6 - 7%1 tax-free2 with an ISA
You can earn stable returns while supporting the UK economy.
Subject to eligibility. Your actual return may be higher or lower and your capital is at risk.
- Choose a lending option to suit you
- Lend easily with automatic tools
- No fees to access your money
- Support 100s of British businesses
Lent to UK businesses since 2010
Innovative Finance ISA
Boost your returns with tax-free interest
Individual Savings Accounts (ISAs) are accounts for saving and investments that let you earn tax-free returns2.
A new type of ISA for online lending
The Funding Circle ISA is an Innovative Finance ISA. This tax year you have a subscription of £20,000 which can be split between a Cash ISA, Stocks & Shares ISA, Lifetime ISA, and Innovative Finance ISA.
Make your money work harder
An Innovative Finance ISA allows you to earn tax-free interest by lending directly to British businesses2. You can earn attractive returns without the volatility that can occur when investing in shares or equities.
Funding Circle has been the most lucrative [peer-to-peer platform]. Since I joined in August 2012, drip feeding cash in, my returns, after all fees and bad debt adjustment, have been 6.2pc.Martin Lewis, writing in The Daily Telegraph, 2013
How lending works
At Funding Circle you lend directly to established small British businesses. They get the funds they need to grow, and you can earn attractive returns as they pay you back each month.
Choose your lending option
To help you get the return you’re looking for, you can choose between two lending options. You can switch options at any time by logging in online.
6 - 7% 1
- You lend to the full range of creditworthy businesses to build a balanced portfolio
- This option has a higher projected return, with a higher estimated bad debt rate
5 - 5.5% 1
- You only lend to creditworthy businesses that have been assessed as lower risk
- This option has a lower projected return, with a lower estimated bad debt rate
Whichever lending option you choose, you'll automatically lend your funds to relevant businesses. We'll also collect and reinvest your monthly repayments.
- The rates shown are the annual projected returns, after fees and bad debts but before tax, that a diversified investor could earn with either lending option. Your actual return may be higher or lower than projected, for example due to the performance of the individual loans your funds are matched with, or a change in macroeconomic conditions. By lending to businesses your capital is at risk. See the full calculation here.
- The tax-free entitlement of an ISA depends on the individual circumstances of each investor, and may be subject to change in the future.
- Interest earned is after fees and bad debt, but before tax.
Simple to use at every step
The Funding Circle ISA works just like our Classic account. With an easy-to-use online account, automatic tools and fantastic investor support, earning attractive and stable returns is quick and simple.
Open your online account
Set up your account in minutes and transfer money from your debit card.
Start lending automatically
Our automatic lending tool allows you to lend small amounts to hundreds of different businesses.
Receive monthly repayments
You’ll typically receive repayments with interest each month from the businesses you’ve lent to.
Repayments are reinvested
By keeping our lending tool switched on, your repayments will then be lent out again to help maximise your earnings.
Limits and transfers
You can only open one Innovative Finance ISA in any tax year. There is a subscription limit of £20,000 this tax year, which you can split across all types of ISA.
Earn even more by transferring your balance from other ISA providers. Simply login to your account to print an ISA transfer form. Read more here.
To help you build a well diversified portfolio for a more stable return, we suggest lending £2,000 or more. If you’d like to start with less, the minimum initial transfer is £1,000.
Accessing your funds
Your funds will be lent to businesses who borrow over 6 months to 5 years, but you have options to access your money at any stage. When you’re ready you have two options:
Withdraw as you go
Turn off reinvesting and withdraw your repayments as they come in.
Withdraw a lump sum
Select the amount you’d like to withdraw, and sell your active loans to other investors using our automatic selling tool.
If you want to transfer your ISA to another provider, you must sell your loans first and transfer the cash raised. Any loans that cannot be sold may no longer be eligible for tax-free interest. Please read our FAQs for more detail.
There are no fees for selling loans. While usually very fast, selling loans is not instant and depends on demand from other investors looking to buy at that time. You can only sell active loans with no credit issues, and not in the last month of their term.
ISA key facts and features
- You have a subscription of £20,000 this year which can be split across all ISA types
- You must be 18+ years of age and a UK resident
- You need a National Insurance number to apply
- You can only subscribe to one Innovative Finance ISA per year
The Funding Circle ISA:
- The Funding Circle ISA is a flexi ISA. Under ISA rules you can take your money out of your ISA account and put it back later in the same tax year, without losing your tax-free entitlement.
- The Funding Circle ISA requires a minimum initial investment of £1,000
- You cannot transfer funds directly from a Classic account to an ISA account. You must first sell your loans, then transfer the money raised into your ISA account.
- You can earn even more by transferring your balance from other ISA providers. Simply login to your account to print an ISA transfer form. Read more here.
- In the unlikely event that Funding Circle goes out of business, you would continue to receive repayments for your loans and our back-up service provider would administer the ISA for you.
How do we manage risk?
Only established businesses who have passed our rigorous credit assessment process can borrow through Funding Circle. However, it’s important to remember that some businesses will not be able to fully repay their loan. We call this a bad debt, and it’s already accounted for in your projected return.
Diversification is the best way to manage risk. This simply means spreading your lending across hundreds of businesses, lending small amounts to each one. To help you build a well diversified portfolio for a more stable return, we suggest lending £2,000 or more. If you’d like to start with less, the minimum initial transfer is £1,000.